Which Work Devices are a Write-Off?
Owning your business means you get to take advantage of many different perks. You can look at the tax deductions list on the IRS website to get an idea of what work devices can be written off. However, there are some specific things about each device you need to understand so you deduct the appropriate amount. It’s never good to blur the lines of your personal life and your work life when it comes to the IRS. These devices are usually safe to write off on your tax return when you understand the rules.
Computers And Similar Technology
According to the IRS tax deduction list and explanation, the business expense you attempt to write off should be reasonable, customary and necessary for your business. So your computer, tablet, notebook or laptop can be classified as business expenses if they fall into those categories. Where it gets tricky is when you keep these items at home and also use them for personal things. It’s best to get a close estimate of how often the device is used for business purposes compared to personal and only deduct the percentage used to run your business.
Cell Phone And Internet
Your cell phone is similar to other types of technology, where you can only deduct the percentage you use for your business. If you have a personal phone and a business phone, then the business phone can likely be deducted 100%. But if you use it for both purposes, only writing off 50% may be more realistic. The same goes for your internet usage at your office or in your home. And if you purchase internet from your hotel, airline or other places while traveling, you can deduct that expense.
Specific Types Of Software
Writing off any software packages you purchased can provide tax relief as well. In most situations, word processing software or programs that help you keep track of your business expenses and income can be written off. But just because you purchase a software package for your work computer doesn’t mean the software can automatically be written off. There has to be a true business purpose for the software. Otherwise, it’s considered to be personal and would not qualify according to the tax deduction list.
It’s easy to get lost in all of the rules of what can be considered a business expense for tax deduction purposes and what isn’t. The tax deduction list isn’t as clear-cut as some people think it is, so the safest bet is to allow a professional tax preparer to help. Rocket Tax offers tax preparation services to ensure small business owners like you get the most tax relief possible. Some people don’t take enough advantage of the deductions available to them, while others try to do too much. We can help ensure your tax return is accurate to prevent any red flags with the IRS. The tax deadline is approaching, so contact us today to see how our services can help you.